Why Advanced Micro Devices (AMD) Is Up Today

Shares of Advanced Micro Devices (AMD) are gaining Tuesday after Ascendiant Capital initiated coverage of the chipmaker with a 'buy' rating.

NEW YORK (TheStreet) -- Advanced Micro Devices (AMD) was gaining 1.8% to $3.88 Tuesday after Ascendiant Capital initiated its coverage of the chipmaker.

Analyst Cody G. Acree started coverage of AMD for the analyst firm, giving the company a "buy" rating and a price target of $5. Acree wrote "While we are not expecting any singular dramatic near-term catalyst, we do see the company working through a methodic restructuring and repositioning that has already reduced spending and earned significant wins that are driving growth at Sony (SNE), Microsoft (MSFT), Verizon (VZ), Apple (AAPL) and others."

Acree notes that AMD's restructuring reduced headcount by 15% and lowered operating expenses by 26%. The restructuring also helped make the chipmaker cash flow positive.

The analyst believes that AMD's new APU chips can help it "regain a moderate share" of the consumer PC market.

TheStreet Ratings team rates ADVANCED MICRO DEVICES as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ADVANCED MICRO DEVICES (AMD) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures."